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Chapter 9

Chapter 9. Secure Funding . You should know :. - How to secure financial resources - The steps you must take to determine the funding you need to raise. -Understand the pros and cons of using your. personal money - The pros and cons of raising money from family and friends .

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Chapter 9

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  1. Chapter 9 Secure Funding

  2. You should know : • - How to secure financial resources • - The steps you must take to determine the funding you need to raise. • -Understand the pros and cons of using your. • personal money • - The pros and cons of raising money from family and friends

  3. -why angle investors invest in unknown start-up companies • -why privet equity investors invest in small companies • The types of debt financing ; secured and unsecured loans . • The pros and cons of stock financing .

  4. Unit 1how to access funding • **Easy to access (sources of fund): • Your Personal saving . • Your Personal loan . • Your Personal productive assets. • Money from Relative . • Money from friends. • **Difficult to access: • Venture Capital firms . • Venture Capital funds . • Private equity firms. • Bank loans.

  5. Unit 1how to access funding Conception to newborn seed capital Infancy to childhood venture capital Childhood to teenage private equity Teenage to maturity short term bank loans, stock financing Maturity long – term bank loans, bonds

  6. Size of the initial financing • First : • The more money you can raise at the beginning ,the better. • Second : • The case of early financing ,less is better .

  7. High / low financing *Advantages *Disadvantages

  8. High financing

  9. Low financing

  10. Definitions Venture capital firm: a company that channels investments to new venture. Private equity firms: Firms that direct investments into young and promising private companies. the aim is to capture the “high-growth stage” in young companies. Venture capital firm: Money that assembled for the purpose of investing in new venture.

  11. Steps from start to finish What you need??

  12. Source of Funding Private Companies Your Saving Government Agencies Your Family Angel investors Your friends and Colleagues Venture Capitalists Banks

  13. Unit 2where to access funding 1- Personal money. 2- Family . 3- Friends . 4- Angel investor . 5- venture capital .

  14. Definitions • Personal Money • Examples • Savings • Mortgage your home. • Buy raw materials using credit card • Sell an item of value to raise cash.

  15. Personal Finance

  16. Definitions Mortgage A loan based on the value of your house or your land. Bankruptcy A declaration that the company is unable to pay back its loans Equity Ownership or part ownership Angel Investor (freelance venture capitalist) A rich individual who invests in early-stage companies in exchange for equity ownership in the business

  17. Angel Investor • freelance venture capitalist • A primary source of capital among early-stage companies. • Do not belong to association or trade (like bank or venture capitalist).

  18. Equity Capital: public and private Private Equity: late and early stage Venture Capital (early stage): Individual and institutional Angel Investor: Individuals in early- stage venture capital

  19. Question 2: What kind of funding sources in your company ??

  20. Unit 3types of capital There are two major types of capital:

  21. Banking and lending institution • * They are not risk taker . • They don’t like to lend money to start-up businesses . • They classified as the most “impersonal” sources of funds .

  22. Stock financing The pose and cons of financing with common stock :

  23. Selling shares TA: MahaAlzailai MGT Department

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